I use the same indicators and parameters on all my chart time frames (daily, 15 minute, 5 minute etc.)
but I trade off of very fast tick charts. I might use a divergence that was spotted on a higher time frame
as a heads-up that a down trend might be in the process of ending.
Then I may pay more attention looking for good entries on the faster charts.
but I trade off of very fast tick charts. I might use a divergence that was spotted on a higher time frame
as a heads-up that a down trend might be in the process of ending.
Then I may pay more attention looking for good entries on the faster charts.
Or
If I missed a good divergence entry for some reason, I might rationalize that it did indeed mark
a price reversal. I begin to look for other entry types such as a Trend Line Break Re-test entry,
an MT SLING entry, a Money-on-the-Floor entry (MOF), a 2B Dragon entry etc.
(I've got a lot of funny name patterns that I see very often)
a price reversal. I begin to look for other entry types such as a Trend Line Break Re-test entry,
an MT SLING entry, a Money-on-the-Floor entry (MOF), a 2B Dragon entry etc.
(I've got a lot of funny name patterns that I see very often)
And
I will never chase after 'missed' trade entries. Missed signals indicate that concentration is waining.
I might refrain from doing any trading or take a short coffee break in order to refresh myself.
Letting a 'missed' opportunity go is far better than taking a poor entry that results in a stop-out.
I might refrain from doing any trading or take a short coffee break in order to refresh myself.
Letting a 'missed' opportunity go is far better than taking a poor entry that results in a stop-out.
There will always be another trade presented.
Spotting divergences depends quite a bit on the charting software you use. For example, when I use
StockCharts, I have more trouble seeing divergence in the MACD histogram if it's shown
as a separate study pane rather than when over-laid with price.
That may be because I can't alter the study pane heights.
StockCharts, I have more trouble seeing divergence in the MACD histogram if it's shown
as a separate study pane rather than when over-laid with price.
That may be because I can't alter the study pane heights.
I don't trade EVERY divergence I see. Reading charts is such a subjective adventure.
All indicators generally reflect the same shape that prices make. That is, if price makes a LL
so will the indicator.
But Indicators inherently lag prices because they are based on prices that have already occurred.
You need to extrapolate what might happen to them going forward. When an indicator diverges
by not mimicking price-action it is alerting me that the strength of the current directional push
is diminishing (relative to the former push).
All indicators generally reflect the same shape that prices make. That is, if price makes a LL
so will the indicator.
But Indicators inherently lag prices because they are based on prices that have already occurred.
You need to extrapolate what might happen to them going forward. When an indicator diverges
by not mimicking price-action it is alerting me that the strength of the current directional push
is diminishing (relative to the former push).
Indicator-to-price divergence is suggesting that a change may be about to happen to price direction.
If we had a set-up that worked every time we would all be bizzionares by now.